Samsung Note 7 worries a reminder to industry to make quality top focus: Huawei

NEW DELHI: Samsung's troubles with the Galaxy Note 7 are a reminder for all companies to be careful to manage internal quality, and make product quality the top priority, China’s Huawei, a key rival of the South Korean major, has said, adding that the smartphone maker was “internally” studying the developments which were a first for the industry.

Huawei is the world’s No 3 smartphone maker and competes closely with the global market leader Samsung in various markets, including India where it is planning an aggressive marketing play in the crucial festival season.

“Internally (we and industry) should be very careful because you cannot ignore any small detail, which can have a big impact,” said George Zhao, president of Honor business unit, which is part of Huawei Corp.

“We respect Samsung, but this is also a reminder to be very, very careful to manage our internal quality, putting quality first and keeping innovation and quality as our strategic control point, and in our DNA,” he added.

Samsung, the world’s largest smartphone maker, Wednesday killed the Galaxy Note 7 phone, just two months after its launch, after two global recalls and many reports of fires, even in its replacement phones. The Galaxy Note 7 crisis has shaved of $18 billion from South Korean consumer electronics major’s market capitalization, even as it cut $2.3 billion off its profit guidance on Thursday.

Latest reports reveal that the company was sending fire-resistant packages to customers in the US as a precaution against possible fires or explosions from Galaxy Note 7 being returned to retailers.

Much like Samsung would have done with its now-doomed flagship in India during Diwali, Huawei plans to spend heavily towards marketing, branding and advertising three new smartphones - Honor 8, Honor 8 Smart and Holly 3 - it launched on Thursday. Holly 3 is the company’s first India-made phone.

“We’ll spend the same as the top tier 1 brands, which is a huge shift from our earlier strategy of telling consumers about the product’s features,” a senior executive said. ET had earlier reported that Samsung and Apple would spend about Rs 100-125 crore each this festive season on marketing and branding activities.

People aware of the company’s plans said that prime time television ad slots will be taken, full page print advertisements and outdoor hoardings carrying Honor branding will be seen in top metro cities.

“We want to match our global ranking in India as well,” Zhao added.

With the new phones, the company is also beginning to sell in the offline retail market, another shift from strategy, on lines similar to Xiaomi, LeEco and others that have taken the offline sales route in recent months.

Honor phones have always been sold online, but from this week, the devices will be available in more than 300 districts across India, with top large format retail chains and small mom-and-pop stores. Offline market is about 70% of the retail market in India which cannot be ignored, the senior executive quoted earlier said, citing GfK data.

The Telecom Regulatory Authority of India (Trai) pulled up Bharti Airtel and Vodafone Idea for warning subscribers of certain plans that their SIM cards would be deactivated if they do not recharge their pre-paid accounts though these subscribers had the minimum required balance.